Legislative Update

In the early hours of July 1, the 145^th General Assembly came to a close; marking the end of one of the most financially challenging General Assembly’s in recent history. The budget bills were drafted and ready for consideration before June 30. The Senate passed the $3.3 billion operating budget on June 29, and the House approved it before midnight on June 30. Nondiscretionary items such as Medicaid, employee health care and pension obligations comprised 2.5% of the roughly 6.5% growth over FY 2010. In the FY 2011 budget, state employees will see the 2.5% pay cut from the current budget year restored. The capital budget for FY 2011 comes to $408.9 million. $124.4 million will go to transportation projects and transportation-related debt service. The other $248.4 million is dedicated to education-related projects. The grant-in-aid bill came to $35.2 million. In a sign of the times, many agencies who receive funding via this legislation each year saw their appropriations cut – and in some cases eliminated. Senior centers, veterans’ organizations and the fire service were not cut.

In the early-going it seemed that this session would be defined by the debate over whether to expand gambling venues in Delaware. There are strong and principled opinions on both sides of this issue in Delaware. However, by mid-session, it was apparent that there were not sufficient votes in the House to pass House Bill 194, legislation which would have laid the groundwork for expansion.

The end of this session brought with it four retirements. Representatives Pam Thornburg (R-Hartley), V. George Carey (R-Milford), William Oberle (R-Beecher’s Lot) and Richard Cathcart (R-Middletown) are each ending distinguished careers in the House. Pam Thornburg will continue to work on important policy issues as the executive director of the Delaware Farm Bureau. While in the House, Representative Thornburg was a staunch advocate for small businesses and the agricultural community. Representative Carey, first elected in 1984, operates a farm near Milford and was a voice for limited government and the interests of his downstate constituents. Representative Oberle, a key legislator for organized labor, will be remembered as one of the giants of the House. First elected in 1976, he was acknowledged by allies and opponents alike as a master of the legislative process and loyal to a fault. Representative Cathcart has the distinction of having served in two different legislative districts during his career. First elected to the House in 1978 in a New Castle area district, he lost his re-election bid in 1982 to Rodney Dixon. Then, in 1996, he ran from a Middletown area district and won re-election. During his second stint in the House, he served as majority leader from 2007 – 2008 and as minority leader since 2009.

The Chamber thanks these legislators for their service and wishes them all the best in the future.

End of Session Priorities largely addressed

In the closing days of the session, Chamber President Mark Kleinschmidt issued the Chamber’s End of Session Priorities. They included the following items:

• Avoid legislation and regulation that would increase the cost of doing business in our state.
Since the outset of this recession, the New Castle County Chamber of Commerce has called on policy makers at all levels of government to hold the line on government spending and to refrain from tax and fee increases and the enactment of legislation and regulation that would increase the costs of doing business in Delaware. This was a consistent theme for the New Castle County Chamber of Commerce throughout the past two years. Fortunately, there were no tax increases this year, and those enacted last year came with a sunset provision that the Chamber lobbied for from the start. New regulation has, with a few exceptions, been largely avoided. The Chamber will continue to press to minimize the regulatory and tax burden on our membership and the business community at large next year.

• Cash to Bond Bill:
On the subject of Capital spending, Mark Kleinschmidt noted: “The Chamber draws a distinction between responsible capital spending and additional operating spending by state government. Capital spending puts people to work, improves our infrastructure and – when managed properly – stimulates our state’s economy.” The Chamber supports the appropriation of additional funding to the FY 2011 Bond Bill. Ultimately, an additional $31 million in cash was sent to the bond bill. When coupled with the $60 million in cash proposed in the governor’s recommended budget which was approved by the Joint Finance Committee – the total cash to the bond bill comes to $91 million. The total FY 2011 bond bill comes to $408.9 million. $124.4 million will go to transportation projects and transportation-related debt service. The other $248.4 million is dedicated to education-related projects.

• Money for the Delaware Strategic Fund:
The Delaware Strategic Fund is a key tool for the Delaware Economic Development Office to provide financial assistance to businesses for attraction and retention purposes. As our state emerges from the worst recession since World War II, it is essential that we set aside funding for private sector job creation. The Chamber lobbied for and supports the Joint Finance Committee’s decision to allocate $15 million to the Strategic Fund for FY 2011. The Chamber applauds the decision to dedicate funding to private sector job creation and will work to encourage ongoing funding support for this important economic development tool.

• Hold the line on discretionary State spending:
On June 18, the Joint Finance Committee finalized the details of the proposed FY 2011 operating budget. Total spending comes to $3.3 billion, representing a growth of 6% over FY 2010, 2.5% of which is comprised of nondiscretionary items such as Medicaid spending. There are still structural budgetary challenges facing state government that will take years to address. Limiting discretionary spending by state government is critical to addressing those structural challenges. Nondiscretionary spending will continue to grow. Federal mandates which impose budgetary obligations on the states are a growing problem. It is critically important that our state manages those items which it can control – discretionary spending.

• Regulatory Flexibility Legislation:
The Chamber supports House Substitute 1 to House Bill 390, an effort to provide much needed regulatory relief for small businesses in the First State. This legislation, introduced by Small Business Caucus co-chairman and 2010 New Castle County Chamber of Commerce Free Enterprise Award winner, Representative Bryon Short (D-7^th), would require state agencies to assess the impact of new regulations for their impact on small businesses, gauge their relevance to current market and regulatory conditions and whether those regulations are meeting their intended goals. While this timely and much needed legislation passed the House, it was not considered by the Senate. The Chamber supports this measure and encourages Representative Short to reintroduce this bill when the 146^th General Assembly commences in January.